Retire Here, Not There: New Mexico

Priced out of Scottsdale and Sedona? Try the "next Arizona."

For decades, the 65-plus crowd has flocked to Arizona hotspots like Scottsdale and Flagstaff. But with prices in these retiree-friendly markets soaring, a growing number of retirees are looking east to what some call the next Arizona: New Mexico.

What many retirees are finding is better deals, say experts: The median home in New Mexico costs just $150,000 and the cost of living is 5% lower than the national average. And for those retirees set on living in the Southwest, the state can be far less expensive than much of Arizona. Santa Fe -- though not exactly cheap at 18% above the national average -- has a lower cost of living than Scottsdale (29% above average) or Sedona (37% above average). Plus, retirees like that taxes in New Mexico are relatively low -- income tax tops out at 4.9% and real estate taxes are below average.

Residents say "The Land of Enchantment" also lives up to its name, with jagged snowy mountains and dense forests in the north, and wide swaths of pink-and-orange deserts as well as white mesas (table-top-shaped cliffs made from the mineral gypsum) further south. All provide hiking, skiing and great vistas. "New Mexico has more attractive weather and appears less expensive and more culturally diverse than Arizona," says Doug Nelson, founder of TCI Wealth Advisors in Santa Fe.

But retirees can't just plunk down anywhere. The state is one of the least populous in the country with just over two million people. Large chunks of land are virtually uninhabited. In these stretches, when you do hit a town, it's bound to be tiny and remote. Furthermore, 18.4% of the state's residents live below the poverty line, compared to 13.8% for the nation as a whole, and the number of doctors per resident in the state is significantly lower than the U.S. average (197 physicians per 100,000 population in New Mexico compared to 221 nationwide, according to Sperling's Best Places).

Still, residents say the 47th state has much to offer retirees, including unique cuisine, art and architecture, thanks to the state's Native American and Hispanic influences.

Here are three destinations advisers say are worth checking out.

Taos: For the artsy skier

After years in Los Angeles, 65-year-old Jeanne Kitzman decided it was time for a move. "It was between Sedona and Taos," she says. She liked that both were artsy communities with outdoor activities. In the end, Taos won out. She liked the friendly, open nature of the people there and the low-key spirit of the community. "I can walk into any store and have a meaningful conversation with someone," she says. And Taos doesn't feel as ritzy as Sedona, she says. "It isn't overflowing with mall shopping, just unique boutiques and plenty of arts."

By the Numbers

Population: 5,263

Median home cost: $252,900

Cost of living: 10.9% higher than average

Unemployment: 9%

Source: Sperling's Best Places

Taos is probably best known for its skiing. The Taos Ski Resort is one of the most popular in the state, with good reason: The diverse terrain offers 110 trails and a vertical drop of 3,274 feet. Then there's the amazing combination of 305 inches of annual snowfall and 300 days of sunshine per year. These same mountains also offer abundant hiking, camping, river-rafting and even llama trekking, says Joan Griffin, a spokesperson for the area.

There are plenty of other charms in Taos as well, including pueblo architecture, dozens of art galleries and a small-town feel. Plus, there are also two well-respected golf courses in the area. "Being at 7500 feet makes the ball go further, so you can improve your golf game just by moving," Griffin jokes. (On the flip side, be aware that Taos, at 7,000 feet above sea level in the city and 12,000 at the ski mountain, is not the perfect altitude for everyone.)

The town has a hippie-ish, new age vibe. "It's a very spiritual and healing place," Griffin says. "There are all sorts of practitioners, classes and opportunities to grow at every level." That may be part of the reason Taos has always been a mecca for artists. Georgia O'Keefe and Agnes Martin have both called Taos home. Today the town has roughly 60 art galleries, many offering art classes and volunteer opportunities for seniors.

The town's history is also a point of interest. The Taos Pueblo is the longest continuously inhabited pueblo in the country. The Pueblo Indians have lived there for more than 1000 years and still live there today without running water or electricity. Interested retirees may attend tours and events, including traditional Pueblo ceremonies.

There is one drawback. Taos is a bit remote with the Sante Fe airport a full hour's drive away. For more options, Albuquerque is two hours away.

Santa Fe: For the offbeat intellectual

This town is pricey, at least by New Mexico standards. The cost of living is nearly 18% higher than average and the median home is priced at nearly $300,000. But, residents say the Sante Fe lifestyle is worth every penny, especially if you're looking for art and culture. Santa Fe has the fourth largest art market in the country in terms of sales, according to the University of New Mexico Bureau of Business and Economic Research. The annual international art fair, Art Santa Fe, attracts thousands of enthusiasts and dealers from around the globe. For residents, the town offers 240 galleries -- many of which stay open late on Fridays providing appetizers and wine. Probably more than 10% of Sante Fe's population is involved in the art world, says Steve Lewis, a spokesperson for the Santa Fe Convention & Visitor's Bureau. This arty vibe is one of the reasons the city is nicknamed "City Different."

By the Numbers

Population: 72,028

Median home cost: $299,900

Cost of living: 17.9% higher than average

Unemployment: 5.5%

Source: Sperling's Best Places

Sante Fe is also the city of reinvention. Experts say there's a reason why so many songs and books are set in this desert bohemia. "We get so many people who come here and want to do something completely new," says Lewis. For many, it's the right place to finally have time to paint or draw all morning, write that novel they've been pondering for decades, or to volunteer at one of the areas' dozens of art and history museums, he says. A retiree who is artsy and intellectual "will be at home here," says Sabato.

The town itself is a mix of a relaxed vibe and big-city sophistication. Retirees often spend the day hiking in the Santa Fe National Forest, just seven miles from downtown, or biking in the nearby Rocky Mountains. Top the day off with Santa Fe's trademark cuisine derived from Native American and Spanish influences.

Sante Fe is home to a major medical center. The Albuquerque airport, which serves 10 major airlines, is about an hour's drive.

Las Cruces: For the golfer who loves variety

Las Cruces is, in many ways, a city of contrasts. It is nestled in the verdant Mesilla Valley but also at the crossroads of two deserts. It is flanked on one side by the Organ Mountains, which seem to erupt from the grasslands, and on the other side by the meandering Rio Grande, which sits on swaths of flat land.

By the Numbers

Population: 92,774

Median home cost: $146,900

Cost of living: 7.5% lower than average

Unemployment: 5.8%

Source: Sperling's Best Places

The culture is also full of contrasts. Pueblos, Apaches and Navajos have called this land home for centuries and their influence (and language) is still strong in the area. But so are European influences. Nowhere is this mix more evident than in the native crafts -- everything from hand-woven Native American ponchos to modern silver jewelry -- sold at the local craft market on Main Street downtown. Meanwhile, Spanish is as common as English here and pueblo architecture abounds. Plus, you can't beat the low cost of living here -- the median home costs just $146,900 and the cost of living is nearly 8% below the national average. True, Las Cruces is a bit isolated. The nearest airport is 40 miles away in El Paso, TX.

Resident say that two big draws make up for the remote location. There's plenty of great golf and Mexico State University is right here, says Chris Faivre, a spokesperson for the Las Cruces Convention & Visitors Bureau. The University offers an orchestra, a new performing arts center, a large sports program and dozens of continuing education courses. Plus, there are four year-round golf courses with greens fees far less than those in Arizona, says Faivre. You can play at courses like the New Mexico State University course, where the NCAA men's and women's championships and tournaments are played, or the Picacho Hills Country Club, which has twice played host to the American Junior Golf Association (AJGA).

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